The FINANCIAL -- Despite the fact that GPI Holding, one of the leading insurance companies in Georgia, does not provide state insurance programmes anymore like other insurance companies in the country, it still experienced an increase in written premium in the first quarter of 2014.

The amount of written premium exceeded GEL 24 million in the first quarter of 2014, while it was about GEL 81 million in 2013 and GEL 75 million in 2012. There has been a 20 percent increase in written premium in the first quarter of 2014 compared to the same period of 2013. Net profit reached GEL 6 million.

“The number of insured people is increasing every year as more and more people realise that insurance is really necessary. The company is having its 13 year anniversary in 2014 and I am happy that every year we are seeing significant improvement, development and positive growth,” said Paata Lomadze, General Director of GPI Holding.

Health insurance and auto insurance are still the most popular products with GPI Holding’s customers, followed by property insurance.

GPI Holding has just become a Golden Brand winner for the fourth time.

Today, along with other products, GPI Holding offers corporate as well as individual health insurance packages to its customers. “There are no significant changes in the corporate health insurance package, but as for the individual health insurance package, GPI Holding has designed special offers for those customers who are involved in the universal healthcare programme. People who are involved in the universal healthcare programme are able to receive the service free of charge. But service is limited in the universal healthcare programme. Therefore GPI Holding offers additional services for them to make their insurance more comprehensive ,” he added.

GPI Holding offers additional services and improved packages for beneficiaries of its universal healthcare. The price of the package starts from GEL 10. It covers dental services, medications, diagnostic services, additional limits for emergency care, an additional GEL 500 for childbirth and an additional limit for planned in-patience treatment from the second year of insurance.

“Policy Medi Care is for those who use the universal healthcare system. The most important thing in our opinion is that those beneficiaries will receive the same service and comfort as those insured by private insurance companies. High quality of service is a priority at GPI Holding and we believe that together with higher limits, reliable and comfortable service are very important for the beneficiaries,” he added.

One of the advantages of the package is that out-patience services are delivered through the private clinics – CURATION and Medicor. While universal healthcare program covers limited out-patience services mainly in the municipal out-patience centres, Policy Medi Care provides for comprehensive medical treatments, diagnostics, routine check-ups and etc..

GPI Holding’s service groups serve clients 24 hours a day and in emergency cases, they at the hospital in order to quickly resolve the relationship between the client and the Government.

Q. The state insurance programmes are being transferred from the insurance companies to the state. How is this process of transmission going and is it painful for the insurance companies?

A. There are still misunderstandings and unresolved issues in terms of the separation process of insurance companies from state programmes. Some people thought it would be a relief for the insurance companies to be free from the state programmes, but it has turned out to be the opposite - the situation has become more complicated. I do hope that the period of transmission of state programmes between the insurance companies and state will pass as painlessly as possible for the insurance companies.

For the insured people the conditions have not changed, nor have they improved - the conditions are the same. Only the way of financing has been changed. The system of financing is different in this case. There is concern that this system will not guarantee the complete financing of services which were completely financed before. The majority of the state insurance programmes have now moved to the universal healthcare programme for which the income of the insurance companies has been reduced. The premiums written through the state insurance programmes have been reduced by 50 percent. But in general, GPI Holding had very positive growth in written premium. The transmission process is damaging for the insurance companies as it is not organized professionally.

Q. The state also intends to take under control some hospitals that were built by insurance companies, especially in the remote regions as insurance companies struggle with the low level of productivity and profitability.. Is this process over and how many clinics of GPI Holding have been nationalised?

A. Operating clinics in the remote regions with few inhabitants is not profitable for a private company despite the fact that there is geographically a need to have hospitals there. So we are negotiating with the state to transfer these clinics. GPI Holding has three clinics which are located in mountainous regions like Kazbegi, Tianeti and Bakuriani. The process of taking the clinics under the state’s control has been going on for two years already. But it has not finished yet. We have been told that there are some technical problems in the governmental structures which are slowing the process.

GPI Holding built ten hospitals in total. As three of them are problematic for the company they will be given to the state and the remaining seven hospitals will be managed by our daughter company.

There have been many positive changes since the new government came into power, but the main problem that they create for our sector is a slow-moving decision making process. This of course hinders the business as it is difficult to set prognosis and make long term plans.

Q. What are the other new programmes that GPI Holding is implementing together with the Government?

A. The state plans to introduce mandatory auto insurance in the near future, which is a very positive step in developing the insurance market. This is third party liability insurance. Third-party liability insurance is purchased by the insured (owner of the vehicle) to cover the losses that may be incurred by the vehicle to the third party. Drivers are often required by their state to have adequate insurance coverage to ensure that damages resulting from an accident can be paid for. Obligatory TPL insurance will be the driver of motor insurance at large.

Mandatory TPL insurance will come into force in the beginning of 2015.

In terms of agro insurance, the state plans to create a national agricultural insurance system. Through this system the state intends to subsidize some part of the insurance premium. This system aims to have more people involved in insurance. When there is a natural disaster people should not complain about it to governmental institutions. At such times they need insurance and it is the insurance companies that will be responsible for compensating them for the damage. Georgia is an agro country. Agriculture is one of the main priorities of the Government. There should be a good, strong agro insurance package in Georgia. Together with the Government we are working on the further development of this direction. This system is also planned to start in 2015. Hail storms are one of the biggest risks affecting Georgian farmers.

Q. What are the new products that GPI Holding has offered its customers recently and what products will you introduce this year?

A. For the first time in Georgia GPI Holding together with TBC Bank issued a credit insurance product. This is a joint innovation product. The idea is that, if a debtor looses his/her job or fails to work due to an accident, payment will be covered by the insurance company. The cost of the policy is 1.5 - 3.5 percent of the monthly payment.

The aim of this product is to insure the debtor maximally from every risk he/she may face while covering monthly payments. The credit insurance applies to all credit products - mortgages, consumer loans, auto loans, TBC Card/Prime Card. Customers may purchase a credit insurance product in any branch or service centre of TBC Bank.

Another product is business travel insurance, which is also a new product. The policy is designed for those who frequently travel during the year and therefore often need travel insurance. Through Business Travel it is possible to purchase the number of days in advance and fix it in one policy. The product Business Travel is available in every country of the world and covers emergency medical assistance with a limit of EUR 50,000.

Just like every new product, the above-mentioned insurance products also need time to become more attractive to customers. In general, we are more focused on developing those products which we already have. However, we have created a new product which is called ‘Policy Comfort’- insurance of interior, fixtures&fitting. For just GEL 10 per month a flat can be insured from fire and natural disasters.

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